The legendary German Mittlestand is
opening to investment, but some worry its successful culture may be
threatened.

Sumi Somaskanda August 30, 2012 06:00

BERLIN, Germany
— When a leading maker of high-tech cement pumps here met China’s largest
heavy construction equipment company, it was love at first sight.

“It
was a perfect match,” says Norbert Scheuch, CEO of the German company
Putzmeister, of its $450 million sale to the Sany Group in January. “Usually
you have to restructure — something doesn’t fit quite right and you have to
make adjustments. But that wasn’t the case.”

The merger is believed to
have been the largest ever between the two countries. It may not be for
long: It’s part of a growing trend that may change the culture of a sector
that has traditionally been wary of outsiders.

Chinese investors are
on a shopping spree in Germany, and in one sector in particular: the
legendary Mittelstand — small and mid-sized companies, many of them
family-owned, that provide the backbone of Europe’s strongest and wealthiest
economy.

Described as the country’s hidden champions in the land of BMW
and Siemens, Mittelstand companies employ more than 60 percent of the German
workforce. Most manufacture niche technologies or obscure products in
great demand, not least in that other economic powerhouse China, one of
Germany’s most important markets.

Peter Englisch, an analyst at Ernst
and Young who works with Mittelstand businesses, calls them “part of German
culture.”

“They prefer to become market leaders in niche markets instead
of simply going after short-term growth,” he says.

From wire
fasteners for champagne bottle tops to machinery, automotive parts and more,
Mittelstand’s products help make Germany one of the world’s largest
exporters.

The definition of a Mittlestand company isn’t exact.
Originally a term for companies employing up to 250 people generating annual
revenues of up to $60 million, it has expanded to include much larger firms
employing several thousand workers and posting profits of hundreds of
millions of dollars.

Nevertheless, Mittelstand businesses share two
characteristics: they are privately listed and have a dominant shareholder
family in management.

Their steady, generally cautious approach to
business helps explain why they have carried Germany through a global
financial crisis that has crippled other European countries.

Englisch
says their size also gives them flexibility. “You don’t have as much
accumulated risk as you do with a big multinational.”

Customers are
willing to pay more for the “Made in Germany” brand that promises
reliability, quality and speed of delivery. Price is often no object for
manufacturers whose production can be held up if malfunctioning equipment
isn’t replaced quickly.

Those qualities are now also attracting Chinese
companies seeking to compete in global markets.

“They realized you
can imitate a lot very quickly,” said Marc Tenbieg, head of the German
Mittelstand Association, of the automobile and machine industries. “They
could imitate 80 percent to perfection. But the last 20 percent, the ‘German
quality,’ they couldn’t get down.”

Purchasing German companies enables the new owners to
trade on solid, established names useful for gaining footholds in European
markets. It also gives China access to the know-how and skills of German
workers and management.

“The Chinese have learned that building a
good brand is actually much more valuable than trying to gain as much
short-term profit as possible,” Tenbieg said.

By their nature, German
Mittlestand companies have tended to fit well into Chinese firms by plugging
production gaps.

“Investors don’t have to buy large companies with many
useless assets,” said Milton Kotler of the Kotler Marketing
group.

Although many Mittelstand companies were reluctant to entertain
outside bids in the past, that’s changed as the euro crisis dried up orders
and encouraged some to open their arms to Chinese suitors.

Despite
the good fit in many cases, however, cultural differences between Chinese
CEOs German employees have sometimes been difficult to overcome.

“You
can have great workers, but if the cultures don’t mesh, you have a big
problem,” Tenbieg says.

But there may be larger problems for German
companies.

Englisch says it’s still unclear what effect Chinese takeovers
will have on the loyalties of trusted customers and on communities in which
Mittelstand companies are located. They are often based in rural towns
or small cities where they have nurtured close ties to local populations
as well as universities and vocational schools.

“The name of the
family, the reputation of the person who has run the company for decades,
who maybe inherited the business from a former generation is important,”
Englisch said. “If the local community knows you, it probably doesn’t want
you to sell to any investor who pays the highest price and doesn’t care
about the employees.”

Some warn that Chinese ownership may harm
Mittlestand companies in the long run. Kotler says Chinese state-owned
companies are interested in keeping intellectual property and know-how for
themselves.

“Sany has built its own production facility in Germany,” he
says. “It’s going to maintain the Putzmeister brand, but it’s going to
invest money in building the Sany brand over Putzmeister. In time, the Sany
brand will prevail.”

Putzmeister’s Scheuch disagrees. He points to
the experience of Porsche and its new parent company
Volkswagen.

“Will Porsche change because it’s now a part of the VW
enterprise?” he says. “Maybe a little in the administration, but Porsche
will remain Porsche.”

However, he admits he can’t predict Sany
Group’s plans.

“There’s always danger,” he says. “But in business, if you
stand still you’ll be passed by.”

Under the terms of the approval,
textile manufacturer RuYi - owned by investors based in China and Japan -
will initially take an 80 per cent stake in Cubbie. That will be sold down
to 51 per cent within three years.

Mr Swan says if the sale proceeds it
will protect jobs and support economic activity in the Dirranbandi and St
George regions of Queensland.

Mr Pyne on Saturday appeared to back the
treasurer's decision.

"Most Australians are in favour of foreign
investment," he told Sky News.

"Of course they are - our country is built
on foreign investment."

Earlier, opposition regional development
spokesman Barnaby Joyce labelled the sale a disgrace and accused Mr Swan of
failing the community.

Cubbie
Station, located near Dirranbandi, Australia, is the largest privately owned
(Cubbie Group) irrigation property in the southern hemisphere.

The
station was created by amalgamating 12 floodplain properties to give Cubbie
a total of 51 water licences.[1] Its huge water storage dams stretch for
more than 28 km along the Culgoa River, part of the Murray-Darling system.
In an average year the Station uses 200,000 megaliters of water, in a good
year as much as 500,000 megalitres. The managing director is John
Grabbe.

The water is used to supply 130 km2 of irrigated cotton and other
crops including wheat, which brings in about $50 million a
year.[2]

The station is licenced to take 460,000 megalitres.[1] It is the
equivalent of all irrigation entitlements downstream in north-western
NSW.[3] The property has the capacity to grow 200 km2 of cotton.
...

This page was last modified on 30 April 2012 at 19:30.

(4)
National Party's Barnaby Joyce says the sale is a betrayal of the national
interest

Barnaby
Joyce says Cubbie sell off a disgrace Lindy Kerin reported this story on
Saturday, September 1, 2012 08:08:00

Listen to MP3 of this story (
minutes) ALTERNATE WMA VERSION | MP3 DOWNLOAD ELIZABETH JACKSON: The Federal
Government's decision to approve the sale of Australia's largest cotton
enterprise to Chinese and Japanese investors has been described as a
disgrace.

The Federal Treasurer, Wayne Swan, says the textile
manufacturer Ruyi will initially own an 80 per cent stake of Cubbie Station
in southern Queensland, but will sell down its interest.

But the
Nationals Senator for Queensland, Barnaby Joyce, says the Treasurer has
failed to protect Australia's national interest.

AM's Lindy Kerin
reports.

LINDY KERIN: In a statement released late yesterday, the Federal
Treasurer announced that a proposal by Shandong Ruyi to buy Cubbie
Station has been given the green light.

Wayne Swan says the Chinese
and Japanese consortium has agreed to a number of undertakings on
employment, management and water use.

He says the company will initially
own 80 per cent, but will sell down its interest to 51 per cent within three
years.

The Federal Treasurer says the decision is in the national
interest and will end a long period of uncertainty.

BARNABY JOYCE:
I'm extremely disappointed. I think that the whole proposition now that we
talk about a so-called national interest in agriculture, it's not, it's a
farce.

LINDY KERIN: The National Party's Barnaby Joyce lives in the
nearby town of St George.

He's described the Government's approval as
a disgrace.

BARNABY JOYCE: Well in a sentence, if the ownership of
Australia's biggest water licence, if the ownership of one of Australia's -
in commercial terms - biggest properties, if one of the biggest, or the
biggest, farms in the Murray-Darling basin, a property responsible for
in excess of 10 per cent of our nation's cotton crop, and therefore
having the capacity to even influence markets in certain areas and
certain regions, is not in our national interest, then the national
interest is a farce.

There is no national interest in agriculture.
Obviously, it quite obviously is in our national interest, and the Foreign
Investment Review Board have basically said it's alright to buy and Mr Swan
has basically let go of Australia's biggest property.

LINDY KERIN:
But Cubbie Station has been under administration for years now, and the
Government hasn't been able to find an Australian buyer. What were the other
options, do you think?

BARNABY JOYCE: Well, the Government's role is not
find a buyer, but the Government could have assisted. And to believe that
people are not interested in cotton properties is absolutely
absurd.

There was the capacity, if they wished, and they've shown even in
the recent weeks, there is capacity to find the money to do it, to buy
Cubbie Station as an entity, break it up into smaller farms, take some
of the water back for the environment. And as those farms are of smaller
commercial value, they would've been vastly easier to move on the
market.

LINDY KERIN: The rural lobby group AgForce says the Federal
Government should take steps to ensure foreign investment doesn't compromise
agriculture in Australia.

AgForce spokesman, Dale Miller.

DALE
MILLER: Well AgForce Queensland's not opposed to commercially motivated
foreign investment, so let's make that clear. But our main concerns are that
that foreign investment doesn't compromise market competition or pricing for
Australian commodity products.

So as long as that foreign investment is
effectively monitored and regulated, we do see some benefit in that capital
flowing into our enterprises.

Two weeks ago I sent
an email to my contact at China Southern Airlines as part of the daily
maintenance of nurturing future column material. Early this year I had
written that Qantas long-haul international could disappear within 10 years.
I was looking towards October, when a new frontal assault begins as China
Southern launches daily flights on its ''Canton route'' to London in
competition with the famed ''kangaroo route''. I underestimated the scale of
this challenge.

China Southern may be obscure to most Australians and its
base city, Guangzhou, is similarly unknown, but it is a force to be reckoned
with. The day after my email was sent I was dispatched to the Chinese
consulate for a visa, placed in a media study group and within days was
on a flight to Guangzhou. Suddenly I was attending a banquet where a
string quartet of young Chinese women in white gowns was playing Click
Go the Shears. Surreal. The week before, the Premier, Barry O'Farrell,
received similar treatment.

Call it soft power. With Chinese
state-owned companies such as China Southern, it is impossible to know where
company strategy ends and government policy begins. China Southern may be
obscure in Australia now but it is the fourth-largest airline in the world
in passengers carried. A few years ago Etihad was a very obscure name in
Australia. Now people attend AFL games at Etihad Stadium and the brand is
mainstream and respected. Ditto Emirates Airlines. Now these three carriers
represent a collective mortal threat to Qantas international.

When I
told the Herald's travel editor about the vortex of soft power and hard sell
I was encountering, she said, ''No one is more aggressive in the Australian
market than China Southern. No one.'' Nor does any airline have its latent
muscle power. It is the biggest airline inside China, by far. It will carry
more than 600,000 passengers into Australia this year. It is adding a new
jet every week and will have a fleet of 500 by the year end. It will carry
about 90 million passengers in 2012. Qantas and Jetstar will carry about 36
million.

China Southern plans to be bringing a million Chinese a year to
Australia by 2020. With a leading domestic position but a modest
international operation, it must expand outwards. Three years ago, the
airline's president and chief executive, Tan Wan'geng, decided Australia
was its No. 1 market for expansion. Since then, growth has exploded,
with passenger numbers up 50 per cent, flights trebling from 14 to 42 a
week, and Australian destinations increased from two to five with the
announcement, last week, of a service to Cairns.

It was easy to see
why the banquets I attended were thick with Australian tourism and airport
officials falling over themselves to accommodate China Southern's
ambitions.

Yet even these numbers do not explain the scale of the
airline's ambition. It is about to embark on constructing Airline City, a
10-year project that will cost well over a billion dollars. The centrepiece
will be the airline's own university. Imagine the feeding frenzy of
bureaucrats, lawyers and environmentalists if a project like this were
proposed in Australia. Which is why nothing like this is envisaged in
Australia.

The head of the CSIRO, Megan Clark, just back from a visit
to Beijing, says Australia is starting to lag in research, development and
patent applications compared with East Asia. It is the mark of a nation not
using enough of its brain.

The Chinese want to use brainpower, not
just horsepower. I received a detailed briefing from Norbert Marx, the
general manager of China Southern's maintenance joint venture, GAMECO, which
is training engineers and mechanics at a rate of almost 400 a year. It will
treble its maintenance capacity in Guangzhou by 2017. It intends to be one
of the biggest aviation maintenance operations in the world, competing with
Lufthansa Technik, where Marx was a senior executive. Qantas is a
customer of GAMECO and it is impossible not to see Qantas outsourcing
more maintenance to operations such as this. China Southern's ambition
reflects Guangzhou's ambition. When the city government realised it
needed a signature building to lift the generic skyline it built Canton
Tower, the tallest tower in the world. Completed in 2010, it is twice
the height of the Sydney Tower and almost twice the height of the Eiffel
Tower. (This year it yielded its tallest title to the Tokyo Skytree.) I
did not understand Guangzhou until I saw it from this tower, then I saw
central planning on a massive scale.

As for the service on China
Southern, was it up to the standard of Qantas and its peer group? No. Even
the CEO, Mr Tan, was forthcoming on this: ''Our difficulty is service
quality. There is much room for improvement. But we want to compete with
Qantas on service quality.'' Was the service on my flights poor? No. China
Southern's obvious advantage is cost. It is offering published round-trip
fares to London of $1800 economy and $5800 business class, where it has
almost flatbed seats. When the Boeing 787 comes into service to London it
will lift comfort standards.

To support growth plans Guangzhou's new
Baiyun International Airport is expanding from two runways to five. (Beijing
Airport, being Beijing, has plans for nine runways.) In contrast, at one end
of the Canton route, London Heathrow can't even build a third runway. At the
other end, Sydney Airport is responding to the growth challenge with one
hand tied behind its back, wrapped in red tape.

Correction: An
incorrect reference to Sydney's lord mayor, Clover Moore, visiting China as
a guest of China Southern has been removed.

Paul Sheehan travelled to
Guangzhou last week as part of a media group hosted by China Southern
Airlines.

China's gold and currency reserves have recently hit the mark
of $2 trillion. The nation can now boast of having the largest state
reserves in the world. The Chinese people save up to 75 percent of their
country's GDP in spite of the fact that China does not pay pensions and
does not have free of charge education and healthcare
systems.

China's gold and currency reserves gained 17.8 percent ($177.9
billion) during the second quarter of 2009. The nation's reserves increased
by $7.7 billion over the first quarter of the current year. Thus, the
People's Republic of China has saved $185.6 billion during the first six
months of the year, although it was $95 billion less than during the
same-year period of 2008.

China takes the first place in the world on
the amounts of its currency reserves with Japan and Russia following it.
Experts say that such a significant growth was achieved due to the
predominance of export over import. The domination of export allowed to
increase the inflow of foreign currency in the country.

Young Chinese
save their cash for a rainy day, just like their parents did 50 years ago.
It is considered a universal tradition with every Chinese family, regardless
of their income.

All Chinese banks belong to the state – there is no
market system there at this point. There is no pension system in the country
either, no free healthcare and no free education at all. The people of China
pay for everything themselves. That is why the level of savings in China
made up 45 percent of the GDP in the beginning of the 2000s and reached the
record amount of 75 percent in 2009. It is hard to imagine that the
Chinese save 75 percent and spend only 25 percent. Specialists say that
such a system can not be found anywhere else in the world. It is worthy
of note that the Chinese savings are not included in $2 trillion of gold
and currency reserves.

Experts continue saying that China will soon
replace the United States as the world leader on the economic arena. The
talks about China's possible leadership emerged soon after the beginning of
the economic crisis. However, no one expected that changes would come so
quickly.

It is worthy of note that it is China's Petrochina that tops
Ernst & Young's list of world's largest companies. The USA's Exxon Mobil
was ranked first on the list only six months ago.

Daria Yurischeva
Bigness.ru

(7) China ups lobbying game, but faces key tests in U.S.,
Canada

(Reuters) - Back in the day, before the U.S. Congress tore apart
China's proposed multi-billion dollar deals with Western companies one after
the other, Beijing's lobbying left little to the imagination.

China's
Washington embassy blasted out form letters to every U.S. lawmaker when it
was upset with Congress, warning of grave damage to Sino-American relations,
congressional aides recall.

One aide to a senator, who was being courted
by arch rival Taiwan, was told by visiting Chinese officials “that all trade
between your state and China will come to a screeching halt!”

The
confrontational tactics rarely worked – in one pivotal decision, Congress in
2005 essentially killed Chinese state oil company CNOOC’s $18.5 billion bid
for U.S. firm Unocal – and now China has largely abandoned
them.

Instead of issuing tirades, the Chinese hire top-notch lobbying
firms whose ranks are filled with well-connected former U.S. and Canadian
officials; buy TV advertisements to buff their image; and seek
acquisitions less likely to stir nationalistic fervor.

Whether this
new strategy fares any better could be known soon. CNOOC is trying to buy
Nexen Inc., a Canadian oil company with assets in the U.S. Gulf, in a deal
valued at $15.1 billion. China’s Wanxiang Group is poised to take over A123
Systems Inc, a struggling U.S. battery maker that received hundreds of
millions of dollars in grants from the Obama administration. And Huawei, a
Chinese company founded by a former People’s Liberation Army soldier, along
with Chinese telecom company ZTE Corp, are coping with a congressional
security investigation.

CNOOC PREPS AHEAD OF BID

China may be the
world’s second largest economy, a veto-wielding permanent member of the U.N.
Security Council and the fastest growing export market for a United States
eager to revive its economy through trade. But the country of 1.3 billion
labors under a poor image in Washington.

Chinese firms – even those
like Wanxiang that are not directly beholden to the ruling Communist Party –
face intense scrutiny from lawmakers who see them as tools of China’s
geopolitical strategy or part of a system that grossly favors their own
firms with allegedly illegal subsidies and what critics see as an
artificially low currency.

CNOOC’s second major bid for a North American
company, Calgary-based Nexen, came after the Chinese firm laid the
groundwork in Canada and after Beijing made an effort to understand how the
U.S. Congress operates. Nexen, Canada’s 10th largest energy firm, has 10
percent of its assets in the U.S. Gulf.

“They know there is no point
in just arriving and doing a brief tour of the country and thinking that
approach will produce results. Those days are over,” said a source familiar
with the Chinese lobbying effort in Canada, who spoke on condition of
anonymity.

When CNOOC came looking for introductions in Canada, it chose
Hill and Knowlton Canada and its president, Michael Coates, a longtime
Conservative who worked for a government minister before becoming a
lobbyist in 1983.

Coates, who was leader of Conservative Prime
Minister Stephen Harper’s election debate preparation team for three federal
elections, accompanied CNOOC Vice President Fang Zhi during talks with top
Canadian bureaucrats in which Fang stressed Canada was an attractive place
to invest. He did not mention any particular targets.

Along with
doing their homework and talking to the right people in financial markets,
Chinese firms had a greater intuitive grasp of what was possible in Canada,
a second source familiar with China’s lobbying said.

“They went after
Nexen because they knew everybody knew Nexen was a mess. If Nexen had been a
crown jewel …” this source said, making clear a bid for a more important
firm would have been rejected.

The companies still need approval from
Canadian authorities.

Hill and Knowlton Canada declined to
comment.

In Washington, CNOOC also hired Hill and Knowlton. Its lobbyists
include a former Democratic congressional aide, Robert Ludke, who worked
with the Chinese company during its failed bid for Unocal.

And CNOOC
is voluntarily submitting its deal for a U.S. government security
review.

“In contrast to 2005, we’re finding people are much more willing
to consider the benefits of the deal from a U.S. perspective,” CNOOC
spokesman Peter Hunt said.

TRANSLATING CONGRESS INTO
CHINESE

The turning point for Chinese lobbying efforts in North America
was the tumultuous CNOOC attempt to buy Unocal, whose blue-and-orange gas
station signs were something of an icon to many, including some U.S.
lawmakers.

In the summer of 2005, Congress voted overwhelmingly
against the bid. It was a protest vote, but CNOOC understood that it meant
the deal was going to be rejected by the U.S. government and it jettisoned
the plan.

China’s U.S. ambassador knew something had to
change.

Just over a week after the vote, the Chinese Embassy retained top
lobbying firm Patton Boggs. The monthly retainer, which was initially
$22,000, has since climbed to $35,000, according to the latest forms
disclosed under the Foreign Agents Registration Act.

A handful of
lawmakers, who were shocked at the visceral reaction to the Unocal deal,
formed a group to help China understand Congress and vice versa. The Chinese
Embassy started inviting members of Congress to meet their policymakers and
its ambassador – then the suave and good-humored Zhou Wenzhong – paid visits
to Capitol Hill where he would take verbal beatings over volatile issues
such as China’s support for Sudan.

“As long as the door was closed and
the media wasn’t there, (lawmakers) and the Chinese discussed third rail
issues,” said one congressional aide. “This allowed Americans to blow off a
lot of steam.”

Representatives, who rarely got the chance to talk to U.S.
Cabinet members, much less Chinese policymakers, were now able to confer
with Beijing’s top ministers and make productive trips to China. The
bipartisan Congressional U.S.-China Working Group “helped translate the
Congress into Chinese,” said the aide.

Gone were the old ham-handed
approaches – like the 20-page blast fax on Taiwan and Tibet that once went
to scores of U.S. lawmakers, according to congressional aides and trade
experts.

China’s sheer economic size and importance as a market
increasingly speak more effectively than its diplomats or hired hands from K
Street.

While Chinese imports to the U.S. remain very high, 420 of the
435 congressional districts saw higher growth in exports to China than they
did to other overseas markets in 2011, according to trade data compiled
by the U.S.-China Business Council. Even districts of strident critics
of Beijing or authors of protectionist legislation aimed at China
enjoyed rapid growth in exports to the Chinese market.

And the tide
of Chinese investment has just begun, with China and its companies sitting
on hundreds of billions of dollars in cash.

NO ONE WANTS TO BE
HUAWEI

CNOOC and Wanxiang are doing whatever it takes to avoid a repeat
of what happened to Huawei, the world’s second largest telecom equipment
maker, which has had deal after deal fall apart in the United
States.

In 2008, Huawei and private equity firm Bain Capital were forced
to give up their bid for 3Com Corp after a U.S. panel rejected the deal
because of national security concerns. Some lawmakers fear that Huawei gear
could allow the Chinese to tap into the U.S. telecommunications network
or even provide a way for it to sabotage systems.

Then in 2011, the
company was forced to relinquish plans to buy some assets from U.S. server
technology firm 3Leaf after the Committee on Foreign Investment in the
United States mandated that Huawei divest certain parts of the
deal.

It was a shock – especially given the deal, which had already been
consummated – was worth just $2 million. Huawei had not even filed with
the U.S. government for security approvals.

In contrast, when
Wanxiang announced in August it would rescue A123 Systems, the companies
quickly said they would ask the U.S. government to review the deal for
potential national security concerns.

The Chinese auto parts maker –
which plans to provide up to $465 million to A123 – has retained a law firm
for the security review, but has not hired lobbyists to make the case for
the takeover.

“We’re confident the process will be transparent and will
be fair. I think we’re trying to help the company and save the jobs,” said
Pin Ni, president of Wanxiang America Corp.

With lawmakers probing
Huawei for any potential threats to U.S. telecommunications, the company has
boosted its lobbying efforts. It plucked Donald Purdy, a member of a White
House staff team that drafted a U.S. national strategy to secure cyberspace
in 2003, to serve as chief security officer for its U.S.
operations.

“Politics are politics. The realities of this industry are
that, whether you are talking infrastructure or devices, it is a
transnational industry. It is utterly borderless,” said William Plummer,
U.S. spokesman for Huawei.

The company now has seven firms registered
to lobby U.S. lawmakers, including APCO, Doyce Boesch and Fleishman-Hillard,
according to forms filed under the lobbying disclosure act. That is up from
four firms in 2011, two in 2010 and one in 2009.

Top lobbyists for
Huawei include William Black, a former chief of staff to Steny Hoyer, then
Democratic leader in the House of Representatives.

Huawei has also
started appealing to mainstream audiences. During this year’s Summer
Olympics, it aired commercials on NBC. The company sponsored a high profile
food fair in Chicago and is set to sponsor similar events across the
country.

In Canada, Huawei has made strenuous efforts to show a long-term
interest in the country since winning a contract in 2008 to build
networks for domestic operators Telus and Bell Canada.

It opened a
Canadian head office in Ontario and has received a grant from the province
to create jobs and invest C$67 million in research and development. Huawei
has since hired an executive from Canadian tech company Nortel Networks to
be its senior vice president and has partnered up with Telus to establish a
center in their names at a leading Canadian university.

LOBBYING NOT
THAT EFFECTIVE

But hiring a former government official doesn’t always
work.

Take China’s ZTE Corp, the world’s fifth largest telecom gear
maker. It hired Jon Christensen, a relatively unknown former Republican
congressman from Nebraska.

The FBI has since opened a criminal
investigation of ZTE’s sale of U.S. computer equipment to Iran in breach of
U.S. sanctions, and Christensen resigned as ZTE’s lobbyist after the probe
became public.

And many lawmakers have yet to be persuaded by
China.

“The fact that they have formalized their lobbying efforts means
that they’re getting bolder and bolder in the actions that they have, and I
think that should concern individuals in the United States,” said
Republican lawmaker Randy Forbes, a key critic of the Unocal
deal.

“A lot of people say they’re
gaining prowess, they’re being more prominent and they’re learning … but I
have never seen it,” said Coen Blaauw of the Formosan Association for Public
Affairs.

But Blaauw says China’s deep pockets and big market
talk.

Referring to the top Republican and Democrat in the House of
Representatives, he said: “My worry is the big corporations who can call
up John Boehner and Nancy Pelosi and tell them ‘If you do this, (the
companies will) lose billions and billions of dollars.’”

US
Secretary of State Hillary Clinton's expected visit this week to the Cook
Islands in the South Pacific has raised geo-political concerns over
competition among major powers in the region.

Clinton's presence as
the most senior US official to attend the Pacific Islands Forum indicates
the United States plans to re-engage with the South Pacific, analysts
said.

"Attending the forum is part of the US pivot to the Asia-Pacific
region," said Da Wei, an expert on US studies at the China Institutes of
Contemporary International Relations.

It's also a show of US "soft
power" and the Obama administration's increased attention to multilateral
organizations, Da said.

Clinton will also pay a two-day visit to China on
Sept 4 and 5, during which the two sides will exchange views on Sino-US
relations and other issues of common concerns, the Foreign Ministry said on
Tuesday.

The two countries' engagement on the Diaoyu Islands, South China
Sea and Clinton's recent visits to Asia, Africa and the South Pacific —
which have been viewed as encircling China — will likely be high on the
agenda, analysts said.

The US State Department is yet to formally
confirm Clinton's visit to the Cook Islands, but local media described her
visit as the biggest since Queen Elizabeth II came to the country in
1974.

The challenges of climate change and protecting one of the world's
last pristine ocean environments are set to dominate the agenda of the
Pacific Islands Forum, but on the sidelines of the summit officials are
abuzz about Clinton's visit, according to AFP.

The 16-nation forum is
largely made up of small island states, along with resource-rich Papua New
Guinea and regional powers Australia and New Zealand.

Fiji's
suspension from the forum and whether to allow the former member back into
the group are expected to be discussed. Fiji was suspended in 2009 after the
2006 military coup, according to Xinhua.

Media reports quoted diplomatic
sources as saying that the United States expects the forum to readmit Fiji,
and has urged Australia and New Zealand to end their isolation of the
country, suggesting they are giving too much room for Chinese moves in the
region, according to Xinhua.

Da said the China factor in US re-engagement
in the South Pacific should not be played up.

"Although China has
increased interactions with countries in this region in recent years, it is
still not a major player in the South Pacific," Da said.

Da said it's
normal for the US to feel challenged as China rises as a "newcomer" in the
South Pacific, an area that has historically had close ties with
Washington.

China has sent participants to the forum since 1990, and
State Councilor Dai Bingguo is said to attend this year's forum, according
to media reports.

Competition is unavoidable as China's influence grows
in places where the US once played a dominant role, Da said.

"But
such competition should not be overstated. It's not necessary to have a
zero-sum game," Da said.

China's presence in the South Pacific is now "a
fact of life", said Australian Foreign Minister Bob Carr.

"My message
really is that Australia and New Zealand have got to live with the fact that
China will want to deliver aid in this part of the world (and) there is
nothing we can do to stop it," Carr told the Australian Financial
Review.

The US has its own Pacific territories in Guam, the Northern
Marianas and Hawaii, but in recent years — with the exception of American
Samoa — it has paid scant attention to the South Pacific.

Michael
Powles, a senior fellow at the Centre for Strategic Studies in Wellington
and a former New Zealand diplomat, said the presence of Washington's top
diplomat at the summit would send a pointed message to Beijing that the US
intends to re-engage in the region.

"The US has suddenly started doing a
lot more in the Pacific after quite a long time of doing the absolute
minimal amount, whereas over the last few years China has been pretty
active," he told AFP.

About Me

'Mission statement'.
I am convinced that jewish individuals and groups have an enormous influence on the world. The MSM are, for almost all people, the only source of information, and these are largely controlled by jewish people.
So there is a huge under-reporting on jewish influence in the world.
I see it as my mission to try to close this gap. To quote Henry Ford: "Corral the 50 wealthiest jews and there will be no wars." `(Thomas Friedman wrote the same in Haaretz, about the war against Iraq! See yellow marked area, blog 573)
If that is true, my mission must be very beneficial to humanity.